Rebalancing Your Investment Portfolio: an Essential Component of Risk Management.

What is rebalancing?

Rebalancing involves adjusting, as needed, the relative distribution of the various securities that make up your investment portfolio. This ensures the asset mix in your portfolio reflects your investment strategy and investor profile at all times. Studies indicate that 90% of an investment portfolio’s volatility can be explained by its asset allocation.

Main Benefits of Rebalancing

• It helps you achieve your financial objectives within their respective investment horizons, whether short, medium, or long term.
• It maintains an optimal balance between the expected potential return of your portfolio and your risk tolerance at all times.
• It mitigates the volatility of your investment portfolio related to market fluctuations.

Rebalancing and Taxation

Rebalancing may have a tax impact on your portfolio if sales of non-registered investments generate capital gains or losses. Discuss your situation with your Desjardins advisor, your key investment partner!

Learn more about rebalancing